But late rush still needed to make full year forecast

The chip industry is banking on a late surge in demand to meet its full year sales forecast, despite the public’s insatiable thirst for silicon-heavy kit in November.

Figures released by the Semiconductor Industry Association late on Monday show worldwide sales in November were $23.1bn, up 2.3 per cent on the year, and up 0.7 per cent on the previous month. Sales for the year to date are $231bn, up 2.8 per cent on the year.

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SIA boss George Scalise said rising energy prices and economic concerns did not seem to have affected consumers of electronic products during the holiday buying season.

However, he added: "While total semiconductor sales continue on pace to surpass the record level of 2006, it will take very strong sales in December to meet our forecast of 3.8 percent growth in 2007."

Scalise reeled off a list of chip-based products that had seen healthy sales in the end of year buying binge, including LCD TVs, music players, digital cameras and cellphones. At the same time, he noted that ASPs on chips were under pressure, particularly on DRAM.

Microprocessor sales in November were up 5.8 per cent on the month and 7.4 per cent on the year. PC microprocessor demand actually pushed up ASPs in this market by 3.2 per cent.

The big question will be whether this buying binge wil continue into 2008.

Economic forecasters are taking a dim view of the year ahead. More tangibly for the silicon market, Gartner last month downgraded its forecast for spending on new chip gear. Chip makers reining back on investment usually suggests consumers may have bitten off all the silicon they can chew for the time being. ®